Thursday, February 11, 2016

Negative Interest Rates could also pressure seniors

Retirees should probably become mindful of the notion of negative interest rates. The term is defined in Investopedia here.

Countries may literally charge companies and individuals for “hoarding” cash in accounts as a way to stimulate spending.  In theory, in some cases, negative interest rates could encourage the buying of equities and help the stock markets.  They could encourage consumer spending, or clean-energy spending (such as electric cars).

They are the financial equivalent of the moral objection to “gawking” or “kibitzing”, making all of life a spectator sport to judge others.

Despite the Fed action to raise rates in December, today Federal Reserve chairman told Congress that negative interest rates “are not off the table”  (USA Today) given the big sell-off partly related to nosediving oil prices.

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